Nominate a Beneficiary
A beneficiary is generally defined as being the named person or persons on a life insurance policy to receive the payout of the policy when you die. By having a beneficiary it will allow your insurance company to pay out the money easily. A Will is also not required to ensure your beneficiary receives the money.
Should you name your spouse as your beneficiary then this will still be the named person even if you divorce at a later date. If you then go on to remarry, your previous named beneficiary will cease and you should inform your insurance company and name a new one if you wish to. It is also fairly common for you to be asked to select a contingent when you name your beneficiary so that if your main beneficiary should die before you then the contingent beneficiary will receive the insurance payout. This will mean that you do not have to worry about any complications that could arise due to the death of your main beneficiary.
The benefits of having a named beneficiary
There are a number of benefits to having a named beneficiary for your life insurance. It means that in the event of your death your insurance money will be made payable to that named person and they will receive all of the proceeds of the policy. You may also have a trustee should you desire that your money is passed onto a young child and therefore they can look after this and carry out your wishes.
A beneficiary also allows you to bypass any additional costs or delays that may occur due to probate. This is the name given to the legal process confirming the appointment of the executor and the validity of the Will.
As the policy holder you can simply change the beneficiary if you wish to. There are two types of beneficiaries possible and these are known as revocable and irrevocable. Both types are used for different reasons. A revocable beneficiary means that all you need to do is complete a form. An irrevocable beneficiary means that the owner and the beneficiary will have to agree to the change and is therefore considered to not be the better of the two options. In most cases where a beneficiary is to be named this will be revocable.